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Products Home / Products / Rajiv Gandhi Equity Savings Scheme / HDFC Rajiv Gandhi Equity Savings Scheme
 
HDFC Rajiv Gandhi Equity Savings Scheme Print

This product is suitable for investors who are seeking*:
  • capital appreciation over long term.
  • investment in equity securities specified as Eligible Securities in Rajiv Gandhi Equity Savings Scheme.
  • high risk. (BROWN)

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Note: Risk is represented as:

(BLUE) investors understand that their principal will be at low risk (YELLOW)) investors understand that their principal will be at medium risk (BROWN) investors understand that their principal will be at high risk
Investment Objective
To generate long term capital appreciation from a portfolio of Eligible Securities as specified in Rajiv Gandhi Equity Savings Scheme. There is no assurance that the investment objective of the Scheme will be realized.

Basic Scheme Information
Nature of Scheme A Close Ended Equity Scheme investing in Eligible Securities as per Rajiv Gandhi Equity Savings Scheme, 2012
Click here to view FAQs
New Fund Offer of Series 1 - February 2013 Opens On February 18, 2013
New Fund Offer of Series 1 - February 2013 Closes On March 14, 2013
Term/Duration of the Series under the Scheme The Scheme offers 4 series having a term/duration of 3 years from the date of allotment of Units.
Plan/Option The respective Series under the Scheme offer Regular Plan and Direct Plan. Regular Plan is for investors who wish to route their investment through any distributor. Direct Plan is for investors who wish to invest directly with the Fund without routing the investment through any distributor.

Both Regular Plan and Direct Plan offer Growth Option and Dividend Payout Option.
Entry Load
(as a % of the Applicable NAV)
Not Applicable.
Pursuant to SEBI circular no. SEBI/IMD/ CIR No.4/ 168230/09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor.

Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors' assessment of various factors including the service rendered by the ARN Holder.
Exit Load
(as a % of the Applicable NAV)


Not Applicable.

The Units under the respective Series cannot be directly redeemed with the Fund before the Maturity/ Final Redemption date as the Units are listed on the stock exchange(s).
Minimum Application Amount

The Minimum amount for application (Purchase / Switch-in) during the NFO period of the respective Series is Rs. 500 and in multiple of Rs. 10 thereafter.
Lock-In-Period Units held under the Scheme by the Unit holders and as declared/designated for availing tax benefits shall be subject to lock-in-periods viz. fixed lock-in and flexible lock-in as specified under the notified Rajiv Gandhi Equity Savings Scheme, 2012. The fixed lock-in-period shall commence from the date of purchase of such Units in the relevant financial year and end one year from the date of purchase of the last set of Units of the Scheme (in the same financial year) on which deduction is claimed under the RGESS.

The flexible lock-in period will be of two years beginning immediately after the end of the fixed lock-in period.

The Depositories will be required to ensure the enforcement of the lock-in on Units under the Scheme.
NAV Disclosure Every Business Day.
Listing The Units of the Scheme are proposed to be listed on Capital Market Segment of the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).

An investor can subscribe (buy) / redeem (sell) Units on a continuous basis on the stock exchange(s) on which the Units are listed during the trading hours on all the trading days.

Please refer to NSE and BSE Disclaimer clauses mentioned in the Scheme Information Document.
Benchmark BSE 100 Index
Tax Benefit under Section 80CCG As per Section 80CCG of the Income-tax Act, 1961, investments made by ‘New Retail Investor’ in this Scheme will qualify for a 50% deduction of the actual amount invested from the taxable income of the financial year. The maximum investment permissible for claiming deduction in a financial year is Rs. 50,000.

The Unit holders who wish to avail tax deduction under HRGESS shall be required to purchase/subscribe as well as hold the units under demat mode only.

Click here to read the Notification received from Ministry of Finance
Click here to read the SEBI Circular.
Current Expense Ratio (#)
(Effective Date 22nd March 2013)

On the first 100 crores daily net assets 2.50%
On the next 300 crores daily net assets 2.25%
On the next 300 crores daily net assets 2.00%
On the balance of the net assets 1.75%

In addition to the above a charge of 20 bps on the daily net assets.

 

Excluding Service Tax on Investment Management Fees, if any. 

Direct Plan shall have a lower expense ratio by 0.50%.

(#) Any change in the expense ratio will be updated within two working days.



Plan Name NAV Date NAV Amount
Growth Option23 Apr 201412.3410
Dividend Option23 Apr 201412.3410
Direct Plan - Growth Option23 Apr 201412.4070
Direct Plan - Dividend Option23 Apr 201412.4070
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Investment Pattern
The table below provides the broad asset allocation of the Portfolio of the respective Series offered under the Scheme to be followed under normal circumstances:

Type of Instruments Allocation Risk Profile
Minimum (% of total assets) Maximum (% of total assets) High / Medium / Low
Equity Securities specified as Eligible Securities for RGESS 95% 100% Medium to High
Money Market Instruments** and Liquid Schemes 0% 5% Low to Medium

** The Scheme shall invest in Money Market Instruments as defined under SEBI (Mutual Funds) Regulations, 1996, with residual maturity of less than or equal to 91 days. Each Series under the Scheme will be managed as a separate portfolio. The Scheme will not invest in ADR/GDR/foreign securities/ derivatives/securitised debt. Pending deployment of funds of the Scheme in securities in terms of the investment objective of the Scheme, the AMC may park the funds of the Scheme in short term deposits of scheduled commercial banks, subject to the guidelines issued by SEBI vide its circular no. SEBI/IMD/CIR No. 1/ 91171 /07 dated April 16, 2007, as amended from time to time. Funds shall be deployed in Eligible Securities in accordance with the investment objective of the scheme within 15 days from the closure of the NFO of the respective Series. Towards the maturity of the Series under the Scheme, the monies may be kept in cash and invested largely in cash equivalents viz. overnight investment in CBLO, reverse repo, money market instruments.
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Investment Strategy

The Scheme would invest in equity securities which are specified as Eligible Securities for RGESS as amended from time to time.

The investment objective of the Scheme is to generate long term capital appreciation from a portfolio of Eligible Securities as specified in Rajiv Gandhi Equity Savings Scheme.

The investment strategy of the Scheme is to build and maintain a diversified portfolio of "Eligible Securities as specified under RGESS'' that have the potential to appreciate in the long run.Companies identified for selection in the portfolio will have demonstrated a potential ability to grow at a reasonable rate for the long term. The aim will be to build a portfolio that adequately reflects a cross-section of the growth areas of the economy from time to time. While the portfolio focuses primarily on a buy and hold strategy at most times, it will balance the same with a rational approach to selling when the anticipated price appreciation being achieved or being no longer possible due to a change in fundamental factors affecting the company or the market in which it competes, or due to the availability of an alternative that, in the view of the Fund Manager offers superior returns.


The investment strategy of the Scheme is to invest in a portfolio of diversified equities from the following universe of Eligible Securities as specified under RGESS :

  1. Equity shares, on the day of purchase, falling in the list of equity declared as "BSE-100" or " CNX-100" by the Bombay Stock Exchange and the National Stock Exchange, as the case may be;
  2. Equity shares of public sector enterprises which are categorised as Maharatna, Navratna or Miniratna by the Central Government;
  3. Follow on Public Offer of sub-clauses 1 and 2 above;
  4. Initial Public Offer of a public sector undertaking wherein the government shareholding is at least fifty-one per cent which is scheduled for getting listed in the relevant previous year and whose annual turnover is not less than four thousand crore rupees during each of the preceding three years The Scheme shall also invest in cash & cash equivalents and money market instruments to meet the liquidity requirements for honouring redemptions (at the time of maturity)/ expenses.
    Though every endeavor will be made to achieve the objective of the Scheme, the AMC/Sponsors/Trustees do not guarantee that the investment objective of the Scheme will be achieved. No guaranteed returns are being offered under the Scheme.


RISK CONTROL

Investments made from the net assets of the Scheme would be in accordance with the investment objective of the Scheme and the provisions of the SEBI (MF) Regulations. The AMC will strive to achieve the investment objective by way of a portfolio comprising predominantly of Eligible Securities as specified under RGESS.

The RGESS guidelines, as amended from time to time would be adhered to in the management of this Scheme. The scheme shall invest in cash & cash equivalents and money market instruments to meet the liquidity requirements for honouring redemptions (at the time of maturity)/ expenses. Every investment opportunity in Money Market Instruments would be assessed with regard to credit risk, interest rate risk and liquidity risk.

Credit Evaluation Policy

The credit evaluation policy of the AMC entails evaluation of credit fundamentals of each investment opportunity. Some of the factors that are evaluated inter-alia may include outlook on the sector, parentage, quality of management, and overall financial strength of the credit. The AMC utilises ratings of recognised rating agencies as an input in the credit evaluation process. Investments in bonds and debenture are usually in instruments that have been assigned high investment grade ratings by a recognized rating agency. In line with SEBI Circular No. MFD/CIR/9/120/ 2000 dated November 24, 2000, the AMC may constitute committee(s) to approve proposals for investments in unrated instruments. The AMC Board and the Trustee shall approve the detailed parameters for such investments. The details of such investments would be communicated by the AMC to the Trustee in their periodical reports. It would also be clearly mentioned in the reports, how the parameters have been complied with. However, in case any security does not fall under the parameters, the prior approval of Board of AMC and Trustee shall be sought.

Interest Rate Risk

An interest rate scenario analysis would be performed on an on-going basis, considering the impact of the developments on the macro-economic front and the demand and supply of funds. Based on the above analysis, the AMC would manage the investments of the Scheme on a dynamic basis to exploit emerging opportunities in the investment universe and manage risks at all points in time.

Market Liquidity Risk

The liquidity of investments made in the Schemes may be restricted by trading volumes, settlement periods and transfer procedures. Although the investment universe constitutes securities which will have high market liquidity, there is a possibility that market liquidity could get impacted on account of company/sector/general market related events and there could be a price impact on account of portfolio rebalancing.


Different segments of the Indian financial markets have different settlement periods and such periods may be extended significantly by unforeseen circumstances. Delays or other problems in settlement of transactions could result in temporary periods when the assets of the Schemes are uninvested and no return is earned thereon. The inability of the Scheme to make intended securities purchases, due to settlement problems, could cause the Schemes to miss certain investment opportunities.

Money market instruments, while fairly liquid, lack a welldeveloped secondary market, which may restrict the selling ability of the Schemes and may lead to the Schemes incurring losses till the security is finally sold. Liquidity Risk on account of unquoted and unlisted Money Market Instrument The liquidity and valuation of the Scheme's investments due to its holdings of unlisted money market instrument may be affected if they have to be sold prior to their target date of divestment. Securities, which are not quoted on the stock exchanges, are inherently illiquid in nature and carry a larger amount of liquidity risk, in comparison to securities that are listed on the exchanges or offer other exit options to the investor. Within the Regulatory limits, the AMC may choose to invest in unlisted securities that offer attractive yields. This may increase the risk of the portfolio.

Applicable NAV (after the scheme opens for repurchase)
The AMC shall update the NAVs on the website of the Mutual Fund (www.hdfcfund.com) and on the website of AMFI (www.amfiindia.com) by 9.00 p.m. on every Business Day. In case of any delay, the reasons for such delay would be explained to AMFI in writing. If the NAVs are not available before commencement of Business Hours on the following day due to any reason, the Mutual Fund shall issue a press release giving reasons and explaining when the Mutual Fund would be able to publish the NAVs..


For list of Self Certified Syndicate Banks (SCSBs) and their Designated Branches (DBs) click on the following links below:

For list of SEBI Website, Please Click Here
For list of NSE Website, List of SCSBs (including details Controlling Branch & Designated Branch)

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Fund Manager
Mr. Srinivas Rao Ravuri
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